The rating action follows Fnac Darty’s announced intention to acquire Italy’s Unieuro for around EUR 249m, which could improve the issuer’s business risk profile at the cost of higher leverage.

The upcoming issuance of EUR 500m senior unsecured debt does not alter the issuer’s rating case. The bond proceeds are earmarked for the refinancing of two bonds maturing in 2024 and 2026.

Following the recent affirmation of the issuer rating of BBB and the revision of the Outlook to Stable from Negative, Scope has updated its analytical report on Fnac Darty S.A.

The Outlook change reflects Scope’s expectation that leverage will reduce to below 2x in 2024, driven by the strict cost control programme, which is helping to maintain operating margins.

The Outlook change reflects expectations that leverage will remain high, driven by pressure on EBITDA. The issuer rating continues to benefit from a strong market position and a good financial risk profile.

The rating upgrade is driven by the improved profitability and credit metrics as Covid-linked operational risks continue to wane.

The rating action is supported by the resilience of the group’s business and financial risk profiles.

The rating action reflects the less severe than expected impact of the pandemic in the first nine months of the year but incorporates uncertainties linked to Q4 2020.

The rating action reflects the important reduction in consumer electronics retail activity that is likely in 2020 as a result of the Covid-19 pandemic.

The rating is mainly driven by the company's high market share in France and robust financial risk profile. The limited international exposure is a rating constraint.